THE ATTOWSET GENERAL
OF TEXAS
March 1, 1988
Honorable Ralph R. Wallace, III Opinion No. JW- 865
Committee on Cultural and
Historical Resources Re: Authority of a county
House of Representatives or city to grant exemp-
P. 0. Box 2910 tions from the hotel/
Austin, Texas 78769 motel occupancy tax to
certain religious, chari-
table and educational
organizations (RQ-1294)
Dear Representative Wallace:
Chapter 156 of the Tax Code imposes a hotel occupancy
tax, levied by the state, "on a person who, under a lease,
cohcession, permit, right of access, license, contract, or
agreement, pays for the use or possession or for the right
to the use or possession of a room or space in a hotel
costing $2 or more each day." Tax Code, 5156.051(a).
Section 156.102 of the Tax Code provides for an "excep-
tion" from the tax for a non-profit corporation or
association "organized and operated exclusively for a
religious, charitable, or educational purpose." Chapter
352 of the Tax Code (previously codified as article
23726-8, V.T.C.S.) permits certain specified counties
likewise to impose by order or resolution of the commis-
sioners court a county hotel occupancy tax. Chapter 351
of the Tax Code (previously codified as article 12695-4.1,
V.T.C.S.) likewise permits a municipality to impose by
ordinance a municipal hotel occupancy tax. Neither
chapter 351 nor chapter 352 mentions any "exception" to-
~the tax for non-profit corporations or associations
"organized and operated exclusively for a religious,
charitable, or educational purpose." You ask:
Do counties and home rule cities under
[chapter 352 of the Tax Code] and [chapter
351 of the Tax Code] have the authority to
grant exemptions from the hotel/motel
occupancy tax to entities such as religious,
charitable and educational organizations,
other than the 30-day exemption in the
p. 4194
Honorable Ralph R. Wallace, III - Page 2 (JM-865)
[alct, without specific language in the law
granting such authority?
The "30-day exemptionItto which you refer is found in
sections 156.102, 351.002(c), and 352.002(c) of the Tax
Code, which "excepts" from the reach of the state tax, the
municipal tax, and the county tax, respectively, a person
who has the right to use or possess a room in a hotel for
at least 30 consecutive days: We do not understand you to
ask whether the aforementioned 30-day tax **exceptions"are
constitutional: accordingly, we will not address that
issue. We understand you to ask only whether a county or
a home-rule city may grant *'exceptionsqlfor religious,
charitable, or educational associations absent statutory
authority. We answer your question in the negative;
counties and home rule cities may not grant such
'exceptions" without specific statutory authority.
Article VIII, section 1, of the Texas Constitution
now designates three types of taxes that the legislature
may levy: property taxes, occupation taxes, and inc;;;
taxes. Additionally, article VIII, section 17, of
Texas Constitution provides:
?
The specification of the objects and
subjects of taxation shall not deprive the
Legislature of the power to require other
subjects or objects to be taxed in such
manner as mav be consistent with the
princioles of taxation fixed in this
Constitution. (Emphasis added.)
In American Transfer & Storaae Co. v. Bullock, 525
S.W.2d 918 (Tex. Civ. ADD. - Austin 1975, writ ref'd). a
taxpayer challenged the--constitutionality of the Limited
Sales, Excise and Use Tax Act on the ground that such
taxes are not specified in article VIII, sectionl. The
court held that, although the types of taxes imposed by
the Limited Sales, Excise and Use Tax Act (now codified as-
Tax Code §5151.001 et sea.) are not enumerated in article
VIII, section 1, the act was not invalid by reason of such.
omission, because article VIII, section 17, specifically
provides that the specification of the subjects and
objects of taxation set forth in article VIII, section 1,
did not deprive the legislature of the power to require
other subjects or objects to be taxed in such manner as
may be consistent with the principles of taxation fixed in
the constitution. See also Guinn v. State, 551 S.W.2d 783
(Tex. Civ. App. - Austin 1977, writ ref'd n.r.e.) (uphold- ?
ing method of requiring employer taxes imposed by article
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Honorable Ralph R. Wallace, III - Page 3 (JM-865)
522123-5, V.T.C.S., which provides for a system of
unemployment compensation for certain specified unemployed
workers). It is pursuant, then, to article VIII, section
17, that chapters 156, 351, and 352 of the Tax Code (and
their respective predecessor statutes) were enacted.
Among the principles of taxation fixed in the
constitution in accordance with which such unspecified
objects or subjects of taxation may be taxed are: that
all property must be taxed and that taxation must be equal
and uniform, Tex. Const. art. VIII, 51 and that "the
legislature reny,by general laws, exempt from taxation" a
specified list of properties, Tex. Const. art. VIII,
02 (a). Section 2(a) also provides that "all laws
exempting property from taxation mentioned in this section
shall be null and void."
In Citv of Wichita Falls v. CooDer, 170 S.W.2d 777
(Tex. Civ. App. - Ft. Worth 1943, writ ref'd), the court
overturned a city ordinance that purported to exempt from
city and county taxes $3,000 of the assessed taxable value
of residence homesteads. At that time, article VIII,
section l-b, of the Texas Constitution exempted $3,000 of
the assessed taxable value of residence homesteads for
state ad valorem taxes only; the amendment to article
VIII, section l-b, that authorized counties, cities,
school districts, and all other political subdivisions to
grant also a $3,000 residence homestead exemption was
enacted in 1972 and took effect January 1, 1973. The
court declared the following:
It is clear to us that it was intended by
the framers of our Constitution that all
property should be subject to taxation, upon
an equal and uniform basis for the purpose
of defraying the governmental expense, ~j&
the excention onlv f.such oronertv as that
document soecificalyv exemots therefrom and
such as the Leaislature shall, under Consti-
tutional restrictions, bv exolicit lanouaae.
declare to be exemot.
It is the universal rule in this state
that the Constitution has definitely
provided for every form of exemption of
property from taxation; that if an exemption
is so made it cannot be enlarged upon either
by the Legislature or by the courts.
. . . .
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Honorable Ralph R. Wallace, III - Page 4 (~~-865)
It is a matter of common knowledge that
there are many taxing bodies and units in
this State; they include the State,
counties, municipal corporations, including
cities and towns, water irrigation dis-
tricts, school districts and others.
The Constitutional provision relating to
exemptions of homesteads from taxation (Art.
8, Sect. l-a) is clearly limited to taxes
for State nurooses. That is only one of the
many taxes, or in other words, taxes for one
of the many purposes to which all property
including homesteads is subject. There can
be no enlargement of that exemption so as to
make it exempt from taxation for any purpose
not expressly stated in the Constitution.
Apparently defendant recognizes its duty
to tax all property (not exempt) within its
limits upon an equal and uniform basis for
the purposes of raising revenue to meet its
operating expenses, to pay interest on its
obligations and to create a sinking fund to
meet its bonded indebtedness at maturity.
It therefore follows that defendant must
levy and collect taxes against residence
homesteads within its corporate limits for
these purposes. The homestead is made tax-
able by law for all purposes except for
State purposes. (Emphasis added.)
170 S.W.Zd 777 at 780-81. See also Graham v. Citv of
g rth Worth 75 S.W.2d 930 (Tex. Civ. App. - Eastland
l&4, writ ;ef#d).
Analogously, we conclude that a home rule city or a
county lacks the authority to grant an wexceptiont* from
the hotel occupancy tax, absent constitutional and-
statutory authority to.do so.
p. 4197
.
Honorable Ralph R. Wallace, III - Page 5 (JM-865)
SUMMARY
Neither a county nor a home rule city
possesses the authority to grant an "excep-
tion" for religious, charitable, or educa-
tional purposes from the hotel occupancy tax
absent constitutional and statutory
authority to do so.
MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LOU MCCREARY
Executive Assistant.Attorney General
JUDGE ZOLLIE STEAKLKY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Committee
Prepared by Jim Moellinger
Assistant Attorney General
p. 4198